Alternatives to local welfare schemes – because being unable to afford a fridge should not mean losing your home
25 Jan 2017
Making a new tenancy work after a period of homelessness is near on impossible if you have no cooker, fridge, carpets or curtains. Local council schemes to help families in extreme financial distress are disappearing in many parts of the country, and without them, more families will find themselves at risk of homelessness. We are looking at existing good practice and new ideas to better help families avoid homelessness – because being unable to afford a fridge should not mean losing your home.
Moving into a new home should be a fresh start for families who have previously been homeless. But ideas of what makes a ‘home’ can be severely tested if families are forced to move in without basic household goods, such as a cooker, fridge, carpets or curtains.
At Shelter, we see far too many families move into new tenancies with few, or no, possessions with which to make a home, and too little money to buy them. Without these basic household essentials, many families struggle to make a success of their tenancy and may find themselves homeless again, with devastating impacts on their health, wellbeing and their children’s education.
Local welfare assistance schemes (the successor to the centrally-administered Social Fund) have provided a crucial safety net for households. But in many areas, with changes to benefits and cuts to local council budgets, this support is in danger of disappearing altogether.
If local welfare assistance is lost, or continues to be too restrictive, there is absolutely no other emergency fund that is flexible enough to help people in financial crisis avoid homelessness. Despite this, the Government has chosen, again, not to include funding for local welfare assistance in the provisional local government finance settlement for 2017/18.
What happens if families can’t afford essentials?
Without this vital source of help (through grants or very low cost loans), families are forced to go without, to cut back on other essentials or to resort to very high cost loans with unfair consumer contract terms through rent-to-own companies and illegal money-lenders. Their income is too low, or their credit history not good enough, to borrow from mainstream lenders.
Our housing and debt caseworkers report that a third of their clients are borrowing money from rent-to-own companies, such as Brighthouse and Perfect Home, to buy essential goods. They report families being charged a total cost of £3,000 for a cooker which would cost £300 on the high street. Even more worryingly, they see an increasing number of clients prioritising payments to Rent to Own companies over their rent, fearful of losing their goods and the money paid towards them but creating a very real risk of homelessness.
A family came to Shelter facing eviction because they had mortgage arrears of over £7,000. They had a Brighthouse debt of £600 that they were paying at over £53 a week. They were so worried about this debt that they had prioritised it over paying both their mortgage and the arrears and now faced losing their home.
A relatively small investment – especially if local councils work together to achieve best value for money – in procuring an essential household item can make all the difference between a family like this sinking or swimming.
Existing good practice and new ideas
The Financial Conduct Authority is undertaking a review of high cost, short-term, credit, which includes these rent-to-own products. And the Homelessness Reduction Bill, currently being discussed in Parliament, will require local authorities to take reasonable steps to prevent any eligible person who is at risk of homelessness from becoming homeless. Keeping a family in their home, or helping them set up a new one, by providing a cooker or a fridge could be a ‘quick win’ for local councils and social landlords.
We are grabbing this opportunity and starting work to analyse and promote alternatives to local welfare schemes, together with our services and service users, housing associations, local authorities and others. We are not starting from a blank page. There are loads of innovative schemes and campaigns across the country, including Fair for You, a not-for-profit community interest company alternative to the short-term, high cost lenders and the End Furniture Poverty campaign.
We will champion existing good practice and identify new ideas to help households take up and sustain a new tenancy following a period of homelessness – or prevent families becoming homeless again through a lack of essential household goods or debt problems. Because not being able to afford basic household essentials should not result in losing your home.